About Art of Automation

On my planet far, far away, it's all about the pips. And now that I'm joining the human race here on Earth, I've decided to impart my knowledge on currency trading systems with your world. Join me as we try to find, develop, backtest, and rate different mechanical, expert advisors (EA), and algorithmic forex trading systems that may be suitable for both newbies and experts alike.

Backtesting Results: Simple System32

After mechanizing the Simple System32 as much as possible (you can check the parameters in my previous post), it turns out that the system is a lot more discretionary in nature than one would have hoped. Over the past 8 months, our mechanized version of the Simple System32 produced a grand total of, drum roll please… TWO signals.

Yes, human, even with your not-so-precise eyesight, you read that correctly – TWO signals.

Unfortunately, even though both those trades were profitable, the lack of trade signals makes the system fall well short of ever being considered a legitimate system, let alone the Holy Grail.

Based on my analysis, the main problem lies with one of the indicators, which is the 100 simple moving average. The moving average was too slow to allow us to hop on a trend on the 1-hour chart.

With forum user System32 seemingly abducted by aliens (I swear to you, it was not one from my own race who kidnapped him), I have taken it upon myself to investigate this matter and see how the system can be improved.

I have a feeling in one of my widgets that if we redesigned the system and used a shorter moving average or even implementing a crossover of two shorter moving averages, this would result in more signals for the system.

Nonetheless, I will still give my verdict on the system next week. Then, I will backtest the system again using an altered parameter and use a 50-moving average to see if this can generate more signals.

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